Correlation Between Shanghai Broadband and Liaoning Chengda
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By analyzing existing cross correlation between Shanghai Broadband Technology and Liaoning Chengda Biotechnology, you can compare the effects of market volatilities on Shanghai Broadband and Liaoning Chengda and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Shanghai Broadband with a short position of Liaoning Chengda. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shanghai Broadband and Liaoning Chengda.
Diversification Opportunities for Shanghai Broadband and Liaoning Chengda
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shanghai and Liaoning is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shanghai Broadband Technology and Liaoning Chengda Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liaoning Chengda Bio and Shanghai Broadband is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Shanghai Broadband Technology are associated (or correlated) with Liaoning Chengda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liaoning Chengda Bio has no effect on the direction of Shanghai Broadband i.e., Shanghai Broadband and Liaoning Chengda go up and down completely randomly.
Pair Corralation between Shanghai Broadband and Liaoning Chengda
Assuming the 90 days trading horizon Shanghai Broadband Technology is expected to under-perform the Liaoning Chengda. In addition to that, Shanghai Broadband is 3.02 times more volatile than Liaoning Chengda Biotechnology. It trades about -0.17 of its total potential returns per unit of risk. Liaoning Chengda Biotechnology is currently generating about -0.08 per unit of volatility. If you would invest 2,696 in Liaoning Chengda Biotechnology on September 28, 2024 and sell it today you would lose (55.00) from holding Liaoning Chengda Biotechnology or give up 2.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shanghai Broadband Technology vs. Liaoning Chengda Biotechnology
Performance |
| Timeline |
| Shanghai Broadband |
| Liaoning Chengda Bio |
Shanghai Broadband and Liaoning Chengda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shanghai Broadband and Liaoning Chengda
The main advantage of trading using opposite Shanghai Broadband and Liaoning Chengda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shanghai Broadband position performs unexpectedly, Liaoning Chengda can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Liaoning Chengda will offset losses from the drop in Liaoning Chengda's long position.| Shanghai Broadband vs. Zijin Mining Group | Shanghai Broadband vs. Wanhua Chemical Group | Shanghai Broadband vs. Baoshan Iron Steel | Shanghai Broadband vs. Shandong Gold Mining |
| Liaoning Chengda vs. Industrial and Commercial | Liaoning Chengda vs. Agricultural Bank of | Liaoning Chengda vs. China Construction Bank | Liaoning Chengda vs. Bank of China |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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